DEERFIELD, Ill.--(BUSINESS WIRE)--Baxalta Incorporated (NYSE: BXLT) today confirmed receipt from Shire plc
(LSE: SHP, NASDAQ: SHPG) of a highly conditional, unsolicited proposal
to acquire all of the outstanding common shares of Baxalta in an
all-stock transaction under which Baxalta shareholders would receive for
each Baxalta share 0.1687 Shire ADRs.

Baxalta noted that it received this same proposal privately on July 10,
2015. In accordance with its fiduciary duties, Baxalta’s Board of
Directors, in consultation with its financial and legal advisors,
carefully reviewed the proposal and unanimously determined that it is
not in the best interests of Baxalta or its shareholders.

“The Board today reaffirmed its conclusion that Shire’s proposal
significantly undervalues Baxalta and its attractive prospects for
growth and value creation, and that a merger at this time would be
severely disruptive at this very early stage of Baxalta’s existence as a
public company and presents a significant and real risk to value
creation for our shareholders,” said Wayne T. Hockmeyer, Ph.D., Chairman
of the Board of Baxalta.

The following is the text of the letter that was sent by Ludwig N.
Hantson, Ph.D., Baxalta’s Chief Executive Officer and President, on July
31, 2015 to Shire’s Chief Executive Officer, Flemming Ornskov, with
respect to Shire’s proposal:

Dear Flemming,

As I previously indicated I would do, I have thoroughly reviewed your
July 10, 2015 proposal with the Baxalta Board of Directors with the
assistance of our legal and financial advisors.During our
meeting this week, the Board unanimously concluded that it is not
prepared to engage with Shire in a discussion about a combination of our
companies based on the value you indicated in your proposal and other
important factors as noted below.

Our board strongly believes that Baxalta’s independent global
infrastructure and world-class manufacturing operations will provide an
excellent platform to grow value for our shareholders.As a new,
publicly-traded entity only since July 1, we are just in the initial
stages of implementing our growth strategy as a standalone company and
our stock has not yet achieved a price level that appropriately reflects
the company’s value and prospects.A transaction at the exchange
ratio you proposed significantly understates Baxalta’s true value.

Moreover, we do not believe that a combination of our two companies
would be strategically complementary, or that our respective product
portfolios would benefit from such a combination.And we do not
think the combination would generate substantial operational or revenue
synergies, which would be critical to any potential value creation for
our shareholders. Perhaps even more importantly, a transaction at this
time would be severely disruptive to our young organization and the
implementation of a wide variety of critical commercial, R&D, and
operational initiatives and thus carries with it significant risks for
our shareholders.

Our board is mindful of its fiduciary obligations to Baxalta’s
shareholders, and we are confident in our standalone plan and our
ability to generate significant shareholder value based on that plan.Baxalta’s platform is well positioned to generate substantial value
for our shareholders and proceeding with a transaction at this time
presents a significant and real risk to that value creation.Our
Board has evaluated your proposal in this context and concluded that it
is not a basis for further discussions.

Sincerely,

Ludwig N. Hantson

Chief Executive Officer and President

The Board of Baxalta is being advised by Goldman Sachs and Citigroup as
to financial matters and Kirkland & Ellis as to legal matters.

About Baxalta

Baxalta Incorporated (NYSE: BXLT) is a $6 billion global
biopharmaceutical leader developing, manufacturing and commercializing
therapies for orphan diseases and underserved conditions in hematology,
oncology and immunology. Driven by passion to make a meaningful impact
on patients’ lives, Baxalta’s broad and diverse pipeline includes
biologics with novel mechanisms and advanced technology platforms such
as gene therapy. The Baxalta Global Innovation and R&D Center is located
in Cambridge, Massachusetts. Launched in 2015 following separation from
Baxter International Inc., Baxalta’s heritage in biopharmaceuticals
spans decades. Baxalta’s therapies are available in more than 100
countries and it has advanced biological manufacturing operations across
12 facilities, including state-of-the-art recombinant production and
plasma fractionation. Headquartered in Northern Illinois, Baxalta
employs 16,000 employees worldwide.

Forward-Looking Statements

This communication includes forward-looking statements, including, but
not limited to, those related to Shire’s unsolicited proposal to acquire
Baxalta, Baxalta’s prospects as a standalone business, Baxalta’s
business strategy, expectations regarding Baxalta’s future financial
results and the ability to create stockholder value, and expectations
regarding anticipated growth. Statements that are predictive in nature,
that depend upon or refer to future events or conditions, that include
words such as “expects,” “anticipates,” “intends,” “plans,” “believes,”
“estimates,” and similar expressions and all other statements in this
communication that are not statements of historical fact are
forward-looking statements. Such statements are made as of the date that
they were first issued and are based on current expectations, beliefs
and assumptions of management. Forward-looking statements are subject to
a number of risks and uncertainties, many of which involve factors or
circumstances that are beyond Baxalta's control and which could cause
actual results to differ materially from those in the forward-looking
statements, including, but not limited to, the following: future actions
that may be taken by Shire in furtherance of its unsolicited proposal;
clinical trial results; satisfaction of regulatory and other
requirements; actions of regulatory bodies and other governmental
authorities; changes in laws and regulations; product quality,
manufacturing or supply issues; patient safety issues; and other risks
identified in Baxalta’s Registration Statement on Form 10 and other
Securities and Exchange Commission filings, all of which are available
on Baxalta’s website. Given the risks and uncertainties inherent in
forward-looking statements, investors are cautioned not to place undue
reliance on any of Baxalta’s forward-looking statements. Subsequent
events and developments may cause Baxalta’s forward-looking statements
to change. Baxalta expressly disclaims any intent or obligation to
update any forward-looking statements except as required by law.